Expect this concern to translate into cash extracted from Wynn’s Macau properties, the crown jewels of his empire.

The worst thing that could happen to Steve Wynn is most likely happening right at this moment.

Over the weekend the Macau gaming regulator expressed concern over accusations of sexual misconduct against Wynn, the billionaire founder of Wynn Entertainment. According to Bloomberg, it has met with members of his Macau management team on the matter.

The worst thing that could happen to Wynn would be for Macau to say #MeToo. For years his company has earned the lion’s share of its revenue on the Chinese territory known for its gambling. In the fourth quarter of last year, Wynn’s corporate earnings jumped 30% entirely on the backs of the company’s two Macau casinos, Wynn Palace and Wynn Macau, which saw revenue growth of 65.5% and 24.1%.

Steve Wynn is a very vulnerable billionaire

Now, if you think Macau’s #MeToo moment is happening because Chinese President Xi Jinping is a feminist, then I have an asset to sell you on a Chinese online investment platform that will definitely yield 50%, I promise.

More likely this is about money. In 2019, Wynn and his fellow casino oligarchs will have to renegotiate their licenses to operate on the peninsula. Expect those negotiations to be harder for moguls than they have ever been in Macau’s history of hedonism (basically since the ’90s).

In its early days, the landscape of Macau was controlled by the Ho family, helmed by Stanley Ho. They still have a lot of power, but Westerners like Wynn and Sheldon Adelson have since muscled their way in to insane amounts of money and power. It hasn’t always been pretty – at least not according to the standards of the US Foreign Corrupt Practices Act.

Now the Chinese economy is slowing down, and the government isn’t just going to want more favourable terms – it’s going to need them.

The writing for this has been on the wall for years. You’re forgiven if you happened to miss the bloody, fearful year everyone thought Macau had met its end. This was around 2014-2015. That’s when the Chinese government went in and gave Macau a makeover, all but destroying the high-roller junket system as Macau had known it. Once untouchable people (some even related to Stanley Ho) went to jail. Suddenly, the government was monitoring and limiting the amount of cash mainland Chinese gamblers were taking out on their UnionPay debit cards.

Suddenly, there were lots of rules, including table limits for the masters of Macau’s casino universe.

Losing your edge

If you ever want to hear Steve Wynn lose his cool, listen to his investor call from October 15, 2015. That’s when the sly, old operator – undoubtedly fully aware that his destiny was fully in the hands of the Chinese government – went on an unseemly rant, criticising the government’s actions.

“In my 45 years of experience, I’ve never seen anything like this before,” Wynn said at the time. “It’s become a major issue in Macau… the impact of government policy in planning … None of us are really clear as to what our environment will be going forward. It makes planning and adjusting almost a mystical process.”

Wynn was back on the program by the following quarter, praising the Chinese government as casino revenue began to recover. He opened the Wynn Macau in 2016 to great success.

Of course, none of that changes the fact that next year Wynn and his fellows will be negotiating with a government likely to be under even greater economic duress than it was in 2015. Officials continue to warn that China must tackle its still quietly growing problems with state and corporate debt or face economic collapse. Xi needs cash. Expect him to go looking for it in foreign bank accounts where he can.

Acting as China’s eyes, ears, and hands in President Donald Trump’s administration may have gotten Wynn a sweeter deal with Macau in 2019. He certainly made sure investors knew he had a plug into the administration.

“As you know, I am acquainted with the administration,” he bragged on a conference call a year ago. “Several of us within in our business were sitting 30 feet from Trump when he took his oath on Friday.”

These are not the words of a man who thought he would have to step down as finance chair of the Republican National Committee in disgrace.

China was most likely incredibly disappointed. Wynn was dutifully doing the Xi government’s bidding in Washington. Recall that in one of the more perplexing moments of this presidency, Attorney General Jeff Sessions almost quit after Wynn nearly talked Trump into sending a billionaire Chinese dissident, Guo Wengui, back to his home country.

China has lost its man in the White House – at least one of them – and it will extract payment for that. It will be interesting to see the terms, since whatever they are, Wynn is only in the position to accept.